Who, When & Why - Purchasing Property using a Corporate Structure

When it comes to real estate investment, many individuals choose to purchase property through a corporate structure. Holding property in this way can provide several advantages, including protection from personal liability and potentially more favourable tax treatment. For these reasons, purchasing property in a corporate entity is an attractive option for both experienced investors as well as those just getting started in the world of real estate development. Here we discuss when and why it is appropriate to purchase property using a corporate structure and who is most likely to benefit from doing so.

A corporate structure is most beneficial for those looking to acquire property with the intention of developing it into something else. In this case, forming a corporation can give investors limited liability protection, meaning any liabilities associated with the property are assumed by the corporation rather than the individual investor. This can be especially beneficial when working on larger development projects where there is a greater potential for financial risk.

Additionally, there are tax advantages associated with holding property in a corporate structure. Corporations can take advantage of certain real estate deductions and credits that individuals cannot access. This can save money and make the overall investment more profitable.

Ultimately, purchasing property through a corporate structure is an attractive option for those looking to minimize their risk, reduce the tax burden associated with investment, or undertake larger real estate projects. While forming a corporation requires additional paperwork and filing fees, the potential benefits are often worth it in the long run.

For more information on this topic, contact an experienced accountant or financial advisor, along with your lawyer, as they will all be able to help you determine if holding property in a corporate structure is the right decision for your investment strategy.

By taking advantage of the benefits associated with corporate structures, investors can potentially maximize their returns on real estate investments while also protecting themselves from liability and reducing their tax burden. Understanding when it is appropriate to purchase property through a corporation can be a valuable tool in any investor’s portfolio.

Do you need help with structuring your property purchases? If so, please call Peter Walker on (08) 8941 6355 or email peter@bowden-mccormack.com.au. For the buying or selling of any property, please call Coralie Waters on (08) 8941 6355 or 0427 885080, or email conveyancer@bowden-mccormack.com.au